The Impact of the Petroleum Industry Act on Corporate Social Responsibility and Taxation in Nigeria’s Upstream Oil and Gas Sector: A Path towards Sustainable Development

Abstract

Nigeria’s upstream oil and gas sector is extensively contributing to the economic growth of the country, but the sector is plagued with challenges around corporate social responsibility (CSR) and taxation practices. The Petroleum Industry Act (PIA) was introduced to tackle these challenges towards promoting sustainable development in Nigeria. The aim of this study is to explore the PIA’s provisions on CSR and taxation, identify the Act’s implementation challenges and improvement opportunities, propose an integrated framework for monitoring and evaluating the PIA’s impact on CSR and taxation over time, and recommend measures for enhancing the PIA’s impact on CSR and taxation support for sustainable development in Nigeria’s upstream oil and gas sector. This study adopts the qualitative desk review method to analyse the existent literature, reports, and documents regarding the PIA’s provisions on CSR and taxation. The findings reveal that the PIA’s provisions greatly emphasize CSR initiatives and taxation transparency in improving responsible ethical business behaviour. An integrated framework for monitoring and evaluating the PIA’s impact over time is developed. This study concludes that the PIA’s provisions can balance CSR and taxation practices for sustainable development. The study’s recommendations include using the integrated framework as a structured strategy for monitoring and evaluating the PIA’s impact. This study contributes to the discussion on the imperatives of ethical business practices and regulatory frameworks for sustainable development drive in the oil and gas sector.

Sustainable Supply Chain Practices in the Oil and Gas Industry: A Case Study

“…The oil and gas (O&G) industry is a major contributor to the world economy [1] and is rapidly expanding to meet the ever-increasing demand for energy [2,3]. The industry has largely met the global energy requirements of the last few decades [4] but this in turn has impacted the environment and the ecosystem severely [2][3][4][5][6][7][8][9]. Increasingly so, attention is now turning to the O&G industry to become 'greener' in nature and to show its green credentials [2].…”

“…These challenges come from a combination of governmental and consumer pressures and include the continuing tension between the need to increase O&G production to meet increasing future demand whilst needing to reduce the industry's environmental footprint, the need to align with and meet various climate change policy and protocol requirements, redesign of the industry's supply chain system such that GSCM practices are driven down the supply chain effectively, a highly complex and integrated end-to-end production system, and costly investment in new technologies and systems required to meet legislation and government targets. This means that the industry is struggling to meet its goals [4,5,7].…”

“…The concept of sustainability has received increasing interest over recent times [10] with one of the major contributions to the topic being the publishing of the Brundtland Report in 1987 [10,11]. Since then, the O&G industry is facing growing pressure from stakeholders to become sustainable and reduce its environmental footprint [3,5]. Global and regional agreements like the Kyoto Protocol, Paris Accord, and United Nations Sustainable Development Goals (SDGs) have been implemented to drive organizations towards sustainability [9,12].…”

“…As a result, the O&G industry has started to respond to the need to develop more pro-active sustainable practices in order to stay ahead of legislation [9]. Amongst the changes observed is the voluntary sharing of information publicly, which is seen as a way to improve stakeholder relationships and corporate brand value [5,13,14]. Researchers have deduced that sustainability reporting in the O&G industry has improved longitudinally from 2 companies in 1998 to 40 companies by 2010 among both national and multinational companies [5][6][7]13,15].…”

“…However, there is still substantial area for improvement in sustainability reporting of operational practices as they have been found to be focused more on social performance rather than on environmental performance [2,5,13]. While the application of sustainable supply chain management (SSCM) practices are improving, academics have pointed out the lack of maturity in the implementation of green supply chain management (GSCM) practices in the O&G industry [1,16].…”